This conversation explores how FAR reforms, the elimination of small business subcontracting plans, shifts to best-in-class GWAC vehicles, and the rise of AI-assisted evaluations are transforming how BD, capture, and proposal teams must operate. Arthur breaks down how small businesses can adapt their teaming and process strategies, what primes must do to stay competitive, and why the new fixed-price environment demands a tighter pricing approach backed by data.
They also dig into FedRAMP, CMMC, cybersecurity expectations, the cultural shifts around DEI, and the real implications of ongoing government shutdowns. Throughout, Arthur highlights where AI can accelerate throughput responsibly, and where human review will always remain essential. This is a must-listen for anyone navigating the future of GovCon.
Host: So a really strong background in proposal management, proposal writing, capture management for US Federal GovCon and SLED. You have actually lived and breathed doing this for a huge portion of your career.
Guest (Arthur Runno): Yeah, ultimately it was my entire career. I had 20 years in federal proposals. I served in the Navy for 10 and a half years and then fell backwards into government contracting after getting out. Ultimately, Turingon was born out of the search for AI tools for previous companies that I was involved with. And it was quickly evident to me that many of those platforms were not built by people who had spent time at a proposal war room.
Turingon and eventually Proposal Pilot was born out of that. Our tagline is built by proposal managers for proposal managers. But we don't just say that — we live it. We have 65 years of combined proposal experience in our senior leadership.
Host: I think it's really useful because although you can provide a tool set that's useful for proposal and capture people, you can also provide insights on what's going on right now in GovCon. It's not just about the tools and features. It's also about the strategy behind it.
You've seen the FAR reforms and broader procurement overhaul being pushed forward. From your vantage point, what do you think the real impact for BD and proposal teams is right now? And what can they expect in the next year or couple of years?
GovCon is the testing ground for global procurement AI; everyone else will follow
Guest: In FAR 19, I wrote an article yesterday for LinkedIn on this topic. It's going to be a fundamental change in the way business is done. The first change is the elimination of small business subcontracting plans. If you are not a large business and were reliant on that for part of your business, what are the odds that a large integrator is going to use a small business if they don't have to?
They removed all reporting requirements to the Small Business Administration. There is no longer any set percentage requirement for socioeconomic designations. And while those designations are retained, the enforcement teeth for sole-source contracts is going away.
For example, 8A contracts — the rule used to be once 8A, always 8A. That is no longer the case. The plus side is we're going to see billions of dollars worth of business that companies who are not 8A have never seen before. AI can make a difference here. The rule of two is still in effect for small business designations. We're going to see many more RFIs, and companies that can capitalize on them will benefit.
The second big difference is in best-in-class vehicles. We're getting away from agency IDIQs and toward best-in-class GWACs like OASIS. CIO-SP4 is going away. NASA SEWP most likely, although funding is in flux. These vehicles will carry the bulk of the work. Getting on them and learning to capitalize on task orders will be crucial.
Host: On this 8A rule you're talking about — is there anything small businesses specifically should be doing right now to adjust teaming or growth strategies? You mentioned AI, but any specifics?
Guest: Process. I came up in the small and medium business market. My first company was a small GovCon when I joined. There were two people, one full-time equivalent on contract. We grew that to $60 million a year in four years with a lean staff.
I learned the importance of having process for responding to IDIQs and task orders quickly, being able to capitalize on opportunities as they emerge, and the value of teaming. Teaming becomes even more important for expanding capabilities.
If you're a prime on OASIS, AI has lowered cost per bid so much that you should be bidding — if not every task order, nearly every task order. Get a large enough team. Provide them with an 80–90% draft using AI. Offer workshare if they're not on the vehicle to help finish the remaining percent. Throw pricing on it and put it in.
OASIS averages 3.4 bidders per task order. The odds favor those who bid more.
Host: So if I'm a small business, I should tighten my processes and use AI intelligently. But if I'm a prime, I should bid as often as possible on everything that comes in?
Guest: Correct — for GWACs and GWAC IDIQs. This does not discount the importance of capture. I strongly believe in capture for high-stakes opportunities.
But AI enables small and medium businesses with lean teams not to leave opportunities on the table. If you're qualified and previously would no-bid due to high cost per bid, AI enables you to submit something respectable. Given low bidders per task order, you have a strong chance of increasing revenue.
Executives see proposals as a cost center, but they’re actually a revenue engine.
Host: There's been a huge push for more fixed-price contracts, shifting risk to contractors. How should proposal and capture teams rethink pricing strategy in this environment?
Guest: I've seen fluctuations over 20 years. During the wars in Iraq and Afghanistan, everything was cost-plus fixed fee. Under the Obama administration, we saw a pivot to firm fixed price.
In a firm fixed price environment, the key is price to win and managing profitability. Look at your base cost using price-to-win fundamentals and then mark up no more than needed to come in as low as possible. Look for efficiencies.
We've been conditioned to bid at the 50th or 75th percentile. But there is still 50% of the recruitable market below where you're bidding. To reach them, you'll need more recruiting, more efficiencies, a broader personnel database, and stronger relationships to bring costs down and stay competitive.
Host: How should people prioritize the changes you're describing to start winning immediately?
Guest: Change always takes time. Whether you're bidding product or services, look at suppliers, look at where costs can be cut, get lean where it makes sense.
I worked with one organization that enjoyed 80% margins on every product, sometimes over 100%. That's atypical in a fixed-price environment because competitors may get that down to 40, 30, or even 20.
Black-hat reviews become more important to understand what competitors will realistically do.
Host: Pricing is stressful. Can AI be used for pricing intelligently?
Guest:
It can be used for elements of pricing. I don't believe the full technology is there yet, although we're building it. We have an upcoming product called Pricer Pilot that will automate that pricing element.
In the interim, tools like Proposal Pilot can generate the price volume so you can focus on the numbers — the part that wins or loses a bid. AI can also assist with market research, helping gather substantiated data for cost realism and intelligent firm fixed price bids.
Host:
I'm seeing AI used for procurement and evaluation. Is that changing how proposals are being scored? How should responses adapt?
Guest: The old adage was proposals were scored, not read. As a proposal manager, I prided myself on narratives, but I took that with a grain of salt.
In an AI world, proposals written by AI may soon be scored by AI. So what does AI look for? Adherence to evaluation criteria becomes critical. Substantiating claims. Following proposal instructions. Addressing everything in the SOW. Compliance is fundamental.
That's why Proposal Pilot has a compliance engine — because AI evaluation is happening already.
Host: I'm seeing this happen in US GovCon faster than anywhere else. I think it's going to trickle into EU, UK public procurement, then enterprise.
Guest: Absolutely. This is going to be a global phenomenon. The administration together with Elon Musk has accelerated it. We're guinea pigs in real time.
There will be protests. What if AI hallucinates a capability? What if AI recommends one awardee but the contracting officer picks another? These issues will be worked out and spread globally.
Host: With FedRAMP modernization and new cyber standards colliding with procurement, how do you see compliance shifts changing proposals?
Guest: In US GovCon, CMMC and FedRAMP are no longer optional. They must be complied with. These certifications are increasingly required, especially within DOD and DHS.
Proposal teams handle massive amounts of sensitive data — solicitations, partner data, past performance. It must be secured. Your adversaries and the government are watching.
Host: If you use an AI platform without FedRAMP certification, can you get fined?
Teams that assume things will stay the same risk becoming obsolete.
Guest: We must distinguish FedRAMP and CMMC. No AI company I know is FedRAMP certified. FedRAMP is for products the government puts data on. AI tools shouldn't be prime contractors — if they are, they're competitors, not vendors.
They must comply with FedRAMP standards. We’re built on AWS GovCloud and inherit its permissions. We were built with CMMC compliance from the ground up.
Host: Some proposal tech software companies don't really understand GovCon requirements.
Guest: Especially inexpensive tools. A lot of ChatGPT wrappers sell proposal AI for $100 a month. There's no way to do that on GovCloud. Server costs alone make it impossible.
If you use such tools, maybe you won't get caught. But in an audit, it may violate federal law.
Guest: Many of these companies were started by talented people from Silicon Valley who never worked in government. They don't understand security or compliance nuances.
At Turingon, we stop at a red team draft. Human in the loop is required. Fully auto-generated proposals pose compliance risks. Everything must be reviewed — even work from proposal veterans.
Host: There’s a flood of AI-powered proposal tools. What questions should teams ask before buying?
Guest: First: Can you do a free trial using your data? If not, that's a red flag. Some major vendors only offer PowerPoint demos at first. If you can't use the product, why?
A proposal tool should stand on its own. You should be able to use it. I don't trust any tool I can't get hands-on.
Host: That’s how software works now.
Guest: Some companies used Silicon Valley VC money. Did the money go into tech or into slick demos?
Please — you don't have to buy us, but don't buy anyone without playing with the product.
Guest: Ask where your data is stored. Ask if the vendor bids on government contracts — you don't want competitors seeing your proposals.
Ask what training is required. Some tools are prompt-heavy. If you need to think up prompts, is the software helping or hindering you?
Also ask about user limits. What happens when your 63rd SME needs access? Proposal managers can't afford delays.
Integrated all-in-one tools can be risky. The best capture tool may not be the best proposal tool. Ask if you can buy only what you need.
Host: GovCon culture is changing. With DEI rollbacks, how do you see messaging shifting?
Guest: Contractors need to move with the winds of each administration. Anticipate shifts. Be prepared for both.
Regardless of who's in power, goals of fairness and opportunity remain. Messaging should avoid partisan buzzwords.
Our organization focuses on diversity because it's the right thing to do and ensures we don't miss out on talent.
Host: Where do you think BD and proposal teams underestimate the scale or speed of these shifts?
Guest: Normalcy bias. People assume things will stay the same. Teams that win must be agile. In any business, assuming recent history will continue leads to missed opportunities.
Guest: AI changes the speed of proposals. The Shipley model — reviews, timing, roles — becomes obsolete. Reviews still matter, but when and how they occur must change. Those who fail to adapt doom themselves.
Host: A lot of proposal people have been laid off. Should they move into different areas?
Guest: Proposals have historically been resilient. I've never been laid off due to a shutdown. But pressures are different now — contract cancellations, AI adoption.
Executives view proposals as cost centers, not revenue centers. If AI doubles output per person, some cut staff instead of increasing bids.
But I expect rehiring and expansion within 12–18 months as AI becomes normalized and opportunities increase.
Host: If you're advising a proposal lead today, what’s the one skill they should invest in?
Guest: AI. Understand how it works at a fundamental level. Learn differences between OpenAI, Anthropic, Google Gemini, Meta Llama.
The better you understand AI, the more it boosts your productivity. You can learn fundamentals in a few hours.
Host: People interested in Turingon or Proposal Pilot — and you're having a bake-off with GovDash?
Guest: Yes. It's sponsored by Orange Slices and judged by Summit Technologies. It'll be the first of its kind. We'll both generate real proposals in real time with neutral arbiters.
Too many AI companies are afraid to test their tech live. We’re not.
Guest: Find me on LinkedIn. Connect, message me. I'm always happy to talk. I’ve taken 2am calls my whole career. I want people to use AI to make life easier and get time back.
Host: Go follow Arthur and Turingon; they post incredibly useful articles. Thank you so much for being on this call.
Guest: Thank you, Chris. It was my pleasure.
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